Euro's pernicious impact on emigration and poverty

Eurosceptics have missed a trick on how the EU, the eurozone and immigration are joined at the hip. By destroying domestic economies the euro encourages economically active people to leave, harming domestic economies still further

Eurosceptics
What a silly idea
Robin_mitchinson
Robin Mitchinson
On 20 May 2014 09:42

There is a critical issue in the EU/immigration debate that has caught fire thanks to UKIP putting it firmly in pole position during their EU election campaign, to the great discomfiture of the main parties. So far UKIP has not exploited this issue.

The EU, the Eurozone and immigration are joined at hip and thigh and are completely inseparable.

The penalty for joining the Eurozone is that members lose control of the monetary system. If an economy hits the  buffers, as it has in virtually the whole of the Club Med, they are disempowered from using the usual remedies; they are unable either to adjust interest rates or devalue.

Ireland got into trouble, despite having an exceptionally well-run economic regime, because it was flooded with the Euro deliberately kept cheap by Germany. This set off a manic property boom coupled with criminally risky bank lending and thus to the inevitable crash whilst the Government looked on helplessly.

The ECB remedies have been massive public expenditure cuts, austerity and falling incomes. In these circumstances, the only effective course is emigration to other EU countries, and not just within the Eurozone.

This tends to worsen the situation in the exporting country because the emigrants will be the economically active. They leave behind the elderly, the sick, the lame and the incurably lazy.

But what they take with them is their purchasing power which reduces domestic demand, for which the solution is to increase exports which can only be achieved through reducing wages still further.

What a disastrous merry-go-round!

Robin Mitchinson is a Contributing Editor to The Commentator. A former barrister, living in the Isle of Man, he is an international public management specialist with almost two decades of experience in institutional development, decentralisation and democratisation processes. He has advised governments and major international institutions across the world

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